And now, this message from the ad industry

As economists try to figure out where the domestic economy is heading, the beleaguered advertising sector is starting to see the first signs of a recovery in ad spending. Often the first to feel the effects of a recession, the industry typically recovers several months after the national economy begins to improve, due its dependence on a revival of corporate profits.Staff reporter Patrick Kearns picked the brains of senior management at five of Taiwan's international advertising firms. The e-mail interviews - in which all participants were given exactly the same questions - shows executives are still smarting from last year's downturn. But the executives project that advertising spending will most likely pick up later this year.

Taipei Times: Given the economic slowdown, how can advertising spending help corporations boost revenue?

Ann Yang (楊淑玲), chief executive officer of Batey Ads, Taiwan: Consumers are more discerning about how they spend their money during a recession. They look for "value" from brands/products. Therefore, if a brand/product can grab the consumer's attention and make them recognize its value, chances of it being put on the shopping list will be greater. Advertising is a necessary evil, and is often the most efficient tool to do the job of getting on that list.

TT: Does entry to WTO and increasing global competition mean Taiwan-based companies need to spend more on branding?

Yang: We can expect that more products from different parts of the world will be available in the marketplace after entry to WTO. This means competition will be intensified whereas products become more homogeneous. What should marketers do? Building a strong brand to differentiate oneself from the competition.

TT: When did your client's advertising spending begin to slow last year and what quarter was the toughest financially?

Yang: Several clients cut advertising budgets in order to achieve their annual profit/loss goals in the second half of last year. The fourth quarter was the toughest financially for our agency.

TT: In terms of advertising spending, what clients or commercial sectors have been hit hardest by the recession in Taiwan?

Yang: Amongst our clients, travel and Internet-related businesses were the most severely hit by the recession.

TT: What did the Sept. 11 terrorist attacks do to ad spending in the third quarter last year?

Yang: The 9-11 event was just like sprinkling salt on the wounds of the sluggish economy. Most advertisers became even more conservative after 9-11. Airlines and tourist industry were the most directly hurt by the event.

TT: Since the beginning of the year, has your company begun to see any signs that advertising spending is on the rise?

Yang: We have not seen numbers picking up. However some of our clients have changed their attitude towards advertising from "spending" to "investment." If clients hold this attitude, I am sure they will not trade off their advertising budget for other expenses.

TT: What is the outlook for Taiwan's advertising sector in 2002?

Yang: While the sector as a whole will begin to recover this year, it may not bounce back to pre-2000 levels.

Visualize the `beauty'

Taipei Times: Given the economic slowdown, how can advertising spending help corporations boost revenue?

Steve Kuo (郭育甫) , general manager, Dentsu, Young & Rubicam Co Ltd: In a market place where consumer behavior has turned conservative, advertising is in fact an essential way to visualize the "beauty" of the future or provide an antidote to escape from dissatisfaction with real life. Also, it is the perfect time to take advantage of competitors that have taken a low-profile stance. Ad spending during an economic slowdown may not boost revenue, however, it will definitely keep revenue from dropping dramatically.

TT: Does entry to WTO and increasing global competition mean Taiwan-based companies need to spend more on branding?

Kuo: The brand is the soul of any product, especially when competition is tough and homogeneity is high.

After entry to WTO, Taiwan-based companies will be competing in a bigger, tougher arena, so therefore, a well-communicated brand is always the preferred brand.